HONG KONG, Nov 24 (Reuters Breakingviews) - The $45 billion top Apple (AAPL.O) supplier Foxconn (2317.TW) is trying to resolve its problems in China with cash. Financial fixes can only do so much to tackle a problem stemming from Beijing’s zero-Covid policy.
Hon Hai Precision Industry, better known as Foxconn, offered a rare apology on Thursday for what it said was a “technical error” relating to the hiring of new employees after violent protests erupted at its Zhengzhou factory that produces most of the world’s iPhones. Workers demanded bonuses to be paid without delay and, in another unusual move, Foxconn is now offering incentives exceeding a month’s wage to those among its 200,000 workforce at the site who want to leave. It quadrupled daily bonuses earlier this month to lure new hires after staff fled. Workers have been upset after being forced to live in difficult conditions designed to stamp out Covid-19 infections.
Analysts at Wuhan-based Tianfeng Securities hint at the practical problems to resolving the mess. On a field trip to Zhengzhou this week, they say the city’s partial lockdown meant they had to walk over 10 miles on foot to the chaos-hit factory. In every way, manufacturers in China face a long and bumpy road to recovery if they try to please both their workers and Beijing. (By Yawen Chen)
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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
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